Surprising Awesome Facts About South Africa’s Real Estate Market
When thinking of Africa, you automatically imagine lions, elephants, zebras and other wildlife. Actually, the continent is fast evolving and there is hardly a chance you will find wild animals wandering in the streets these days. African countries are among of the quickest growing economies of 2018, with Ethiopia sitting at the number 5 position – globally.
Aside from economic expansion, African countries also have some of the highest high population growths, leading to a huge demand for housing and retail space. This is the reason Africa is now one of the hottest places when it comes to property investment.
Here are some of the lesser known facts about Africa’s booming real estate industry:
Most developers are not Africans.
Foreign investment is making a tremendous impact on Africa’s real estate industry, most investors being Middle Easterners, Asians, and Russians. Two key factors behind the appeal are a growing tourist industry and favorable exchange rates. International hotel groups are relentlessly expanding their African portfolios but tourism is just one of the attractions.
Housing is often cheap.
Only a handful of Africans can afford upmarket homes. This is why foreigners are the more common owners of luxury properties in the continent. If you’re thinking of a long-term investment, cheap housing may be too risky. You may pocket a bigger profit after selling one luxury villa than many low-cost properties. For one, you need to find a local bank that will grant mortgages to low-income buyers.
Even if a simple urban unit cost as low as $10-20,000, it would be pipe dream for most local folks. Yet this type of dwelling is desperately needed everywhere in Africa. However, if one of your goals as a developer is to uplift the lives of the unfortunate, this is a good path to take.
Nigeria is booming.
Nigeria has emerged from the world’s most devastating recession in more than 20 years, and it is now drawing international interest for its two rapidly expanding sectors: technology and agriculture. Even Facebook and Google are planning to base their African headquarters in Lagos.
South African real estate is on top.
Even South Africa’s unending corruption problems have not stopped it from becoming a popular investment hub. The rand stays weak against global currencies and the cost of living is significantly low. Low-cost housing is available all over, and the tourism sector is at its best. International investors are constantly putting money into the areas of recreation and accommodation.
Sometimes, it gets complicated.
Africa is hardly a simple, almost overflowing with nationalities and cultures. A 50% deposit is often required when you buy land. In certain countries, such as Mozambique, only the government can own land. In any case, spend time doing some research so you can learn more before investing in African real estate.